Report Examines Barriers and Benefits to Investment in Smart Grid

Danfoss, manufacturer of high-efficiency electronic and mechanical components and controls for air-conditioning, heating, refrigeration, and motion systems, has published a report summarizing how building owners, engineers, and manufacturers view the smart grid.

The Ivanovich Group, a third-party firm, interviewed senior facilities and plant-services executives for industrial, K-12 school, university, commercial office, and government buildings; senior executives for engineering firms; and senior executives for HVAC product manufacturers to learn what they know and what they think about the smart grid.

“Survey responses indicate there is skepticism and still low awareness on what the smart grid is, what it can do, and how much it will cost, which underscores the need for communication,” Robert Wilkins, vice president, public affairs, Danfoss, said. “The report also highlights the obstacles and challenges that must be addressed by all stakeholders if we are to realize the benefits the smart grid offers, including multiple opportunities for reducing peak load.”

Although most respondents believe elements of the smart grid will be in place within three to five years, 43 percent feel it is unlikely the smart grid will be substantially complete in that same time frame. Fifty-two percent of the respondents, however, indicated they are engaged in some form of smart-grid activity.

Building owners listed costs as the No. 1 barrier to investment in the smart grid. Because many buildings are not equipped with control systems that interact with the smart grid, that investment may include retrocommissioning or retrofits.

Respondents cited lower electricity costs, followed by better access to information that aids energy management, as the leading reasons to support the smart grid. Respondents also cited shorter duration of power outages.

Other key findings:

• Building owners, engineers, and manufacturers agreed on the top four motivators to invest in smart-grid technologies: more effective communications from utilities, financial incentives, significantly reduced electricity rates, and security.

• In addition to costs, respondents expressed concern about reliability and power quality.

• HVAC manufacturers have assumed a leadership role in the development of the smart grid and relevant products.